Maple Street Biscuit Company eyes PE funding or strategic partnership to accelerate expansion, co-founder says

In October 2016, Mergermarket’s Emily Fasold reported that Maple Street Biscuit was likely to seek PE funding or a strategic partnership, but that the company had also become a full sale target for larger restaurant groups.  She identified Scott Moore as the majority owner and GrayRobinson and The Grigg’s Group as advisors to the company, connections that might have been leveraged to gain an introduction to the company’s co-founder.  At the same time, Emily reported that because the company was in high growth mode, it wasn’t ready to sell in the immediate term.

October 2019, almost three years to the day, it was announced that Maple Street Biscuit had been bought by Cracker Barrel for $36m

Maple Street Biscuit Company, a closely held restaurant chain, will turn to either private equity or a strategic partnership with a restaurant or retail company to fund its rapid expansion plans, co-founder Scott Moore told Mergermarket.

The Jacksonville, Florida-based company is open to conversations with interested financial sponsors as soon as possible, according to Moore, who said that the restaurant group could use funding to open up to 100 new locations across the South and Southeast within the next five years.

Moore said private equity suitors approach Maple Street on a monthly basis. Although past approaches have been turned down, the co-founder mentioned that he is now ready to entertain discussions with firms that could help grow the business. “We’re at the stage where we’ve proven that the concept has legs and we’re going to need some kind of additional capital if we’re going to grow at the rate I think we can,” he said.

Maple Street expects to generate USD 10m in revenue this year, up from USD 6m in 2015, Moore said. The 200-employee company has been profitable since inception and has EBITDA margins of 17%, he noted.

At present, Maple Street operates eight corporate-owned locations in Florida and Tennessee and is scheduled to open additional locations in Tallahassee, Florida and its hometown of Jacksonville by the year’s end, according to Moore. The average unit volume (AUV) for its units is USD 1.1m, he mentioned.

Another avenue for growth that Maple Street would consider is forging a strategic partnership or joint venture with an established retail or restaurant company that could lend its experience with rapid growth and operating units in multiple states, Moore said. The company was in the mature stages of conversation this year with an Atlanta-based firm that offered to purchase a stake in the business and receive the right to franchise the brand, although the founders ultimately decided against it, he explained.

Founded by Moore and co-founder Gus Evans in 2012, Maple Street Biscuits has been funded completely through cash flow to date, the executive said. Moore owns a 65% stake in the business and two silent investors, as well as Evans and Chris Sears, both of whom work in operations, own the remainder.

In recent years Maple Street had also become a full sale target for larger restaurant groups, according to Moore. The co-founder noted that a publicly traded restaurant chain approached Maple Street with a buyout offer in 2014, and earlier this year a Florida-based fast food chicken chain that is looking to break into the breakfast category approached the company. Moore declined to publicly identify the names of both companies.

Yet, Maple Street is in high growth mode and is “not ready to sell anytime soon,” according to Moore, who acknowledged that the company could eventually be sold to a larger restaurant group. An IPO is another potential outcome for the company, although it would be a long-term proposition, he added.

Maple Street’s specialty is modern Southern comfort food “with a twist,” Moore noted. The company serves biscuit sandwiches, salads and traditional southern-style side dishes, among other items. It sees the highest customer volume during brunch hours, he added.

In 2014, Maple Street acquired 51% of a Jacksonville-based coffee company that was re-named and now operates under the Red Leaf Coffee moniker and acts as the Maple Street’s proprietary coffee business. The coffee arm has been kept separate from Maple Street so the owners can have the option to invest or manage it separately if they chose to do so, Moore explained.

Corporate advisors for Maple Street include law firm GrayRobinson and accounting firm The Griggs Group.

Maple Street Biscuit bought by Cracker Barrel Old Country Store for USD 36m